Rattler IPO offers midstream Permian water exposure

Published August 9th, 2018

An oil and gas infrastructure company with an EBITDA margin of 73% is planning to become the only publicly traded, pure-play Permian midstream operator by conducting a Nasdaq IPO led by Credit Suisse, BofA Merrill Lynch and JP Morgan.

Rattler Midstream Partners, which generated EBITDA of $28.8 million on revenues of $39.3 million in 2017, is backed by Diamondback Energy Inc., a Nasdaq-listed E&P company which is currently Rattler’s only client. Among the assets contributed by Diamondback to Rattler ahead of the spin-off include 589,000 Bbl/d of saltwater disposal capacity and 740,700 Bbl/d of freshwater gathering capacity. The assets include wells, frac’ pits, pipelines and treatment facilities to treat and distribute aquifer water to drilling and completion sites.

With much of the acquisition activity in the midstream oilfield water services space currently being undertaken by private equity, this is a chance for mainstream institutional investors to gain sector exposure.